Schroeder's government to step down to make way for Schroeder

German parliament voted no-confidence in Gerhard Schroeder's government at the chancellor's own request Friday, setting the stage for new elections at a time of economic sluggishness and growing discontent.

Schroeder told the legislators that he needed a new mandate to govern after a series of defeats in regional elections - but conservative opposition leader Angela Merkel branded him unfit to govern after years of high unemployment and dismal economic growth.

The 601-strong Bundestag lower house voted 296-151 against the government, with 148 abstentions, reports Reuters.

Under Germany's law President Horst Koehler now has 21 days to decide whether to accept the result and call an election, which would probably be held Sept. 18. However - in on of the few scenarios where the figurehead president can wield decisive influence - he does have the right to reject the vote and ask Schroeder to continue governing. As CNN notes, under normal circumstances Koehler has virtually no political power.

"Koehler is under enormous pressure," CNN cited Dietmar Herz, political scientist at Erfurt University. "He's kept his cards close to his chest and no one knows what he'll decide. The risks are enormous. We'll have a state crisis if he doesn't dissolve parliament, a government unable to govern."

Schroeder, chancellor for the past 7 years, shocked the nation on May 22 when he announced plans to bring the federal elections forward by a full year, following a stinging defeat for his party in the large German state of North Rhine-Westphalia. If the election goes ahead, he faces a daunting challenge in the face of opinion polls that put his SPD 17-21 points behind Merkel's conservatives. Voter discontent stems from record high unemployment and government pro-market reforms that have failed to revive Europe's largest economy, says Reuters.